Any thoughts on b2b ecommerce not hot in India,unlike b2c which I believe is way overheated.

By Sudhakar adapa on May 31, 2012 6 Comments / 1587 views

Just wondering why there are not too many b2b ecommerce portals in India,isn’t the space not lucrative,what we have is a traditional market place/platform model.we are seriously considering b2b play,conventional wisdom says timing is not right,many ecommerce portals struggling,but i think all the problems faced by ecommerce in India,high customer acquisition cost,consumer loyalty.payment gateways can be addressed in b2b.any thoughts would be highly appreciated.

Comments

Sudhakar adapa

6 Comments

Amit Arvind June 1, 2012, 6:26 am

Could you give a few examples of what you consider B2B ecommerce portals in the world.
Sudhakar adapa June 1, 2012, 6:43 am

Hi Amit,most of the ecommerce portals even globally are in the platform model take alibaba,eBay,in India tradus,Indiamart etc.unlike b2c portals which own inventory and sell it to consumers.just wondering why.
Amit Shroff October 5, 2014, 5:56 pm
Sudhakar,

Some quick facts on why we don’t have too many B2C eCommerce portal:
1. Bulk Order – In case of B2B customer would be purchasing in bulk, delivery would take time depending on inventory and order size.
2. Payments – In general there is 30 or 60 days credit, an online payment option might not work for this kind of payment since the payment amount would big and I don’t think buyer or seller either of them would like bear this additional cost.
3. Black Money – Since majority of business like real estate, spices, hardware etc have black money, online payment means converting them to white money and paying additional taxes.
4. Order Size : Online payment limit, you can make payment upto say 50k, 1lac etc but if you wish to make a payment of 50 lac online, I don’t think it would be possible through a credit card or debit card or net banking using any 3rd party payment gateway.
5. Product Price – You cannot have uniform price for all customers, since prices would change based on customer relationship and history etc.
6. Invoice / Billing – In most of the case it would be TAX Invoice if VAT is applicable, so that the customer can take TAX benefit. Hence they would need original invoices.
7. Tax – Different Products / States would have different tax policies, hence if an online store should be able to address this.
8. Way Bill – Inter State Orders would need way bill so that products can be delivered, this again requires physical interference.
If we wish to make this possible online, then certain changes into system are mandatory like:
1. Automatic online Tax deposit.
2. Online Waybill System
3. Smooth Online Payment – Minimize Black Money
4. Accurate Inventory Analysis
5. Credit Base Online Payment System
6. Online Freight Calculator
I hope my response have been helpful to you.
Suresh Mirchandani October 8, 2014, 1:59 pm

I have ideas on B2B since I designed Export Directories for 20 Odd verticals. Also missed launching something like Alibaba. If you have the capital we can create powerful B2B Portals with longevity. Contact only if you have the capital suresh.singlewatts@gmail.com
Kamal Tripathi October 8, 2014, 6:32 pm

Just a correction. IndiaMart is just a marketing platform, in fact none of Indian players in ecommerce facilitate transactions. Alibaba, though facilitates transactions and provides guarantees, if you check its listing rules, is more akin to marketing.
Samir Dahotre November 12, 2014, 11:53 am

1. SAP has thousands of mid and large corporates on their backend B2B systems…. e.g. Bajaj Auto component suppliers on one end, Bajaj in middle, Bajaj Dealers at other end,… extending to customers. Suppliers and Dealers and Bajaj use a singe bank (enforced by Bajaj)… they are on a single supply chain finance system linking SAP to banking system hence payment, credit cycles and even taxes are taken care of

2. However not everyone can afford SAP…. B2B Portal is a great idea… just the Goal, Business Strategy, target suppliers, target customers should be well defined. One of the challenges will probably be taxation but then the CA’s can take care of that.

I have worked on B2B for over 20 years in IT in companies like Microsoft (ERP & host of apps), Infosys Finacle Core and Internet Banking etc.. and have sold to large corporates from BFSI, Mfg, Telco… if u need more tips do reach out Samir@perspective.net.in

B2B on backend is hot due to SAP and the likes…. u would be the first to bring it to thousands of small businesses and make them a ton of money!! all the best!